Jaret Seiberg of Cowen noted in the report that the Nov. 8 election will determine which party controls the House and Senate for the next two years.

And that outcome will then affect a number of issues related to housing finance policy, he said.

Assuming Republicans "will at least gain control of the House," Seiberg writes, that likely means no first-time homebuyer tax credit.

The tax credit is a refundable federal tax credit of up to $15,000 given to first-time homebuyers through an amendment to the Internal Revenue Service tax code.

Seiberg noted that Democrats tried to pass the tax credit last year with a so-called reconciliation bill. But he added that a new reconciliation bill is unlikely.

The original settlement had another important housing component - rehab housing.

Seiberg noted that the program earmarked billions of dollars for the construction, renovation or purchase of affordable public housing that would help address rental housing." He noted, "It's hard to see how this will make it through the House of Representatives.

Seiberg writes that Fannie Mae and Freddie Mac are likely to remain under government regulation regardless of the outcome of the election.

Fannie and Freddie are federally backed home mortgage companies, created by Congress.

They buy and guarantee mortgages issued through lenders such as banks and financial technology companies. They then hold the mortgages or sell them as securities in the secondary market.

They are directly supervised by the federal government. in 2008, the government took control of them and placed them under the supervision of the Federal Housing Finance Agency as the housing market began to melt down due to subprime lending.

The Trump administration has tried to get Fannie and Freddie out of government oversight. But don't expect that to happen anytime soon, Seiberg wrote, and no matter who wins.

"The issue is politically contentious. It divides Democrats and Republicans. We don't see a bipartisan solution," he noted." What could happen is more discussion of regulatory reform, although it's hard for us to see action until after the 2024 election."

Regardless of who wins, expect lower premiums for potential mortgage borrowers, Seiberg said.

If a potential homeowner has a lower credit score, or saves for a smaller down payment, they could opt for an FHA loan instead of a conventional loan.

But FHA loans require a mortgage insurance premium, which is an additional fee paid by the homeowner to secure the loan.

There are two aspects to the insurance premium. One is an upfront fee, and the other is an annual payment.

According to the agency's website, FHA borrowers currently pay an annual premium of 0.80 percent per year on loans less than or equal to $625,000 with a down payment of 5 percent or more.

If mortgage insurance rates are cut, homeowners could save thousands of dollars a year if they purchase a new home or refinance.

For a $150,000 home, that's $1,200 a year in insurance premiums (or $100 a month).

"President Biden already has his [Federal Housing Administration] director and [Housing and Urban Development] secretary. that's why even a Republican sweep shouldn't stop the Biden team from cutting FHA premiums," Seiberg said.

"We still expect a 25-basis-point reduction in prepayment costs and a 25-basis-point reduction in annual premiums," he added.

In mid-October, a federal appeals court said the Consumer Financial Protection Bureau, a financial watchdog, is unconstitutional because of its funding problems.

If the Supreme Court agrees, Seiberg said, it could lead to the invalidation of both the Qualified Mortgage Rule and the revised Real Estate Settlement Procedures Act (RESPA).

According to the Urban Institute, the QM rule, which was created by the CFPB, sets standards for lenders and investors so they can protect themselves from lawsuits by borrowers who claim they took out loans they can't repay.

It's in consumers' interest that RESPA prohibit things like kickbacks for business referrals, thankless fee arrangements and more.

And "it could create regulatory confusion because lenders won't know what rules to follow," he stressed.

At the Mortgage Bankers Association annual meeting in Nashville, Tennessee, the issue was brought up as an important concern among lenders that needs attention.

Seiberg noted that if the rules of the road are not clear, then consumers may sue lenders more frequently for predatory or unethical behavior, and therefore lenders may face more legal liability.

"The solution is for Congress to authorize funding for the agency," he added, "and then its prior actions can be approved."